Commercial Sellers of DVC Points

[Jay Foster]

Jay,

33 posts in a years time and most deal with commercial renting.

Everyone has there "hot topics", I certainly have mine but I can't help but wonder if you have been directly or indirectly affected by this.

Why is this your focus here on the Dis? Do you work for DVC and are coming here to scare a few renters?

Thank you.

I'm a lurker mostly and no I don't work for DVC but that did make me laugh.

I think when I retire that might be a cool job though. I can tell you that if you call Disney and ask to discuss people who commercially rent that you are going to get the same person I spoke with who I believe will remember my name. As to why it bothered me, it did affect me when I tried to book a reservation and from reading this board, I figured out what was happening. As to trying to scare anyone, that is not my intent. I just saw a problem, it affected myself and other owners, I made a few calls and discovered that Disney was already aware of the problem and taking action to correct it as any business should. Frankly, no one should be scared of anything. Of course, if you are running DVC like the Wechslers (to what appears to me as a business), then I think you are going to experience some problems in the near future with your business.

It also affects all of us who are DVC owners because the commercial renters book up the high season with tons of reservations and then those of us that use DVC as it is supposed to be used, get locked out. There are other ways I think it affects us as well.

 

[Y-ASK]

33 posts in a years time and most deal with commercial renting.

Let's put this into perspective: 17 of those 33 post were for other issues and not commerical renting. You could say "many" but at the point in time when you made this statement it was not "most". And of course Jay is going to post many times in the two threads that he started about this topic, wouldn't you? If people would stop looking for some deeper meaning or motive and take what he writes at face value he might even stick around for awhile and post on other topics in other threads .

Y-ASK

 

[littlestar]

DVC could care less about tax issues. It isn't there tax issues but the person doing the renting. The only thing they care about is there bottom line.

The rest of your post ITA.

There's been articles in the Orlando paper about tax revenue and timeshares. I would think Disney would have to be careful when it comes to tax issues with their properties.

 

[dumbo71]

There's been articles in the Orlando paper about tax revenue and timeshares. I would think Disney would have to be careful when it comes to tax issues with their properties.

I disagree. DVC has no tax issues when someone chooses to rent there points out. The person renting does. By the way if DVC really cared about tax issues why not just turn over the names of the suspected commercial renters to the IRS? I'm sure they would take care of them.

DVC cares about DVC, period. Commercial renters must have been hurting DVC's bottom line. Breakage income above the 2.5% that goes back into the dues must have been taking a hit.

Also, DVC better be very careful who they single out. Just because someone has 20 rentals with none in there name, it does not mean they are renting. Those could be gifts. How DVC plans on proving a rental for profit is beyond me.

Now some would say they already have removed rentals from Ebay. Even if they have many involve copyright laws not renting per say.

 

[dumbo71]

Let's put this into perspective: 17 of those 33 post were for other issues and not commerical renting. You could say "many" but at the point in time when you made this statement it was not "most". And of course Jay is going to post many times in the two threads that he started about this topic, wouldn't you? If people would stop looking for some deeper meaning or motive and take what he writes at face value he might even stick around for awhile and post on other topics in other threads .

Y-ASK

Fair enough, almost half of his posts deal with this topic.

Make no mistake, I want Jay to stick around. We could use a few more guys like him on our side.

Sometimes in an effort to verify, additional questions may be necessary.

I've seen no reason to doubt Jay's validity.

 

[littlestar]

I disagree. DVC has no tax issues when someone chooses to rent there points out.

The word "their" means a lot. When Disney enforced the limit on one transfer in or out a year, that virtually stopped commercial renters getting unlimited transfers of points to rent out - points they weren't paying dues/property tax on.

 

[JimC]

Littlestar -- help me understand the point you are trying to make about the taxes in the previous posts. Are you stating that the rentals should be assessed a resort tax, like any other hotel room? Is that the "unpaid" tax that you are talking about?

 

[greenban]

I wouldn't assume the renters aren't declaring the rental income. Many do and I certainly did when I rented. Greenban rents and I'm sure he declares as well.

DVC could care less about tax issues. It isn't there tax issues but the person doing the renting. The only thing they care about is there bottom line.

The rest of your post ITA.

The IRS scares me far more than the DVC or Disney, you bet my rental income was reported!

In fact whenever the IRS sends me a letter, I pay off whatever charge they have assessed, and then my accountant usually gets it refunded when he clears up the error. He tells me not to pay, but like I said, I fear the IRS.

Free advice to all.....Don't play with the IRS!!!

-Tony

BTW I'm glad you came back as well Jay!

 

[littlestar]

Littlestar -- help me understand the point you are trying to make about the taxes in the previous posts. Are you stating that the rentals should be assessed a resort tax, like any other hotel room? Is that the "unpaid" tax that you are talking about?

That's what I'm afraid of happening - that a local government will want to assess occupancy taxes/resort tax on all owners if they think they are not getting their fair share. Isn't Maui doing that to timeshare owners now? Maybe I'm worrying about this needlessly, but I don't know.

 

[JimC]

That's what I'm afraid of happening - that a local government will want to assess occupancy taxes/resort tax on all owners if they think they are not getting their fair share. Isn't Maui doing that to timeshare owners now? Maybe I'm worrying about this needlessly, but I don't know.

I do know that many state and local jurisdictions are examining taxes that might be collected from transient owners. You see these in resort taxes, rental car taxes, and those insidious special assessment fees on hotel and rental car bills. Easy to do this as those paying rarely are voters in the jurisdiction.

I don't know how many other jurisdictions are assessing or enforcing sales/resort taxes against timeshare rentals. It certainly would not surprise me if that were the case. It would make for some interesting research.

Thanks.

 

[Beca]

Hold on now! Jay's information never stated that "someone who owns THOUSANDS of points is subject to restrictions". Let's not blow this out of proportion. Jay's information stated that "someone making 20 reservations in different names in a 12 month period would essentially be a "red flag" to Disney and they would look into it if this happens ". "Looked into" and "Subject to restrictuions" is two totally different points of view. Becca, unless you have specific information that you can tell us, (like maybe the wording of one of the letters sent from DVC) I would hold back on spreading rumors of "unfair restrictions". I'm sure your friend has a firm foundation to stand on if he is using the points for his employees or giving them away. If he's found to be renting them commerically in a business then all bets are off.

Y-ASK

The letter my friend received did not say "20 reservations in different names". It just said "20 reservations in a 12 month period". In addition, my friend received a letter stating that he had been identified as a commercial renter when he has NEVER rented. Remember, the letters are not going out to everyone (which is why you and I have not received one), they are only going to people to warn them that they have been identified as commercial renters, to let these people know what criteria will be used on them in the future. Needless to say, he is ready to go "toe to toe" with DVC on this one, as he has NEVER rented a single point.

 

[donaldbuzz&minnie]

I can't imagine that Disney is going to go after people with a lot of points who use those points legitimately - if you have over 1000 points you might be giving them out to friends and family year long. They have to start somewhere, though, in sorting out the blatant troublemakers. If any account is flagged for further investigation, is that really such a big deal when you aren't selling Disney points as a business? I'm not understanding the concern here - not challenging, just genuinely don't see why this is a problem. Are legitimate 1000 pt owners worried that they're going to be swept up like dolphins in a tuna net?

I'd love to see the commercial sellers put out of business. Thanks, Jay!

 

[Tamar]

D'you suppose the high number of contracts listed for resale right now has anything to do with the letters? There seem to be at least twice as many as the last time I peeked at the TSS list a few months ago....

 

[Y-ASK]

Needless to say, he is ready to go "toe to toe" with DVC on this one, as he has NEVER rented a single point.

Well I'm glad your friend is not a commerical renter. It really is unforunate that many other owners/commerical renters have gone against thier agreement with DVC after thier purchase which has resulted in your friend getting "the letter". But I can't blame DVC for trying to clean up the rule breakers. I really don't think your friend needs to go "toe to toe". I would think an intelligently written letter, on company letterhead, setting the record straight should work just fine.

But this situation kind opens up other quesitons. Did your friend purchase all of these points using his business name or personally? If he purchased it in his own name (personally) then that might explain why he got "the letter" and opens up even more questions I.E. wouldn't he able to write off the purchase over time as an expense if it were to have bought them through the company, etc.

Y-ASK

 

[Beca]

But this situation kind opens up other quesitons. Did your friend purchase all of these points using his business name or personally? If he purchased it in his own name (personally) then that might explain why he got "the letter" and opens up even more questions I.E. wouldn't he able to write off the purchase over time as an expense if it were to have bought them through the company, etc.

Y-ASK

That's a very good question, and one to which I do not have the answer. He's a pretty savvy guy, so I can totally see him having the points under his business name, but I know the points were originally purchased for him, and then not used by him...thus the "rewards" for his employees. For that reason, I am not sure they would be under his business name. It's probably whatever way his accountants or lawyers set it up.

He's not planning on taking any action with DVC right now. He is just going to continue using his points as he always has. He did say he will be watching closely to see what happens after the 20th ressie. But yes, I am SURE he could give DVC the proper paperwork, tax records or whatever to show that most of the people who stay on his points are either family or employees (I don't know what he would do about friends, though ). But, he could certainly provide enough information to be "safe" under the eyes of DVC.

But, the issue for him is that the standard that DVC is using to identify commercial renters have lumped him into the same category, and he now may find himself in the position of "defending" or "explaining" the use of HIS points, and he has received a letter telling him so. He found the letter not only inappropriate, but very un-friendly, as it stated that DVC had identified him as a commercial renter, and he is not. Granted, he may be the ONLY person in DVC's system who uses his points in this way...and, he understands that....but still, he's not happy about it. He said, "Why should I have to defend the way I use my YEARLY ALLOCATED points and you do not?"

Don't get me wrong...I am not real worried about this guy. He has enough lawyers on his payroll to defend himself quite nicely. I just brought it up because it is a "glitch" in DVC's new guidelines that I think might prove very interesting. I will keep you guys informed (as I am "allowed to") if any of his ressies actually do get cancelled.

 

[Caskbill]

Just wondering, if your friend was driving a white, late model 'such and such' car, with just him and another friend in it, and a bank robbery took place that night, by two robbers, driving the same year, color, and make of car, and so the police pulled him over to check him out, the question is....

Would he be mad and upset at the police?

Or would he realize the police were only doing their duty to try to catch the 'bad' guys, and accept the inconvenience he encountered.

If your friend's 'pattern' of reservations matched the same 'patterns of reservations' used by commercial renters, in clear violation of Disney policy, it makes sense he would be flagged as a commercial renter.

Just .02

 

[Muushka]

Caskbill, for a minute there I thought I was watching 'My Cousin Vinny'.
Sorry, just subscribing.....Carry on.........

 

[JimMIA]

Needless to say, he is ready to go "toe to toe" with DVC on this one, as he has NEVER rented a single point.

If his lawyers suggest "going toe to toe" with DVC over this, he should change lawyers.

Any sensible lawyer would resolve this with a simple letter explaining that he's doing absolutely nothing that is at odds with the POS. Many businesses own thousands of points and use them for employee reward purposes; DVC even sells the program for that express purpose.

 

[bluslag]

How do commercial renters make their reservations. I realize they own a lot of points and call at the 11 month to book these prime times but when we call for any reservation we have to give everyones names that will be staying in the room. Do they make up names when they book because they really haven't rented it themselves yet. I'm glad they have stopped the transferring of points which gave the owner the right to have those points become whatever resort they were tranferred into. But I'm confused how the owner can make all those reservations. Maybe they should have to give a SS that match the name that it is being reserved for. I know noone likes to give out their SS but just trying to figure out this. Am I just not getting this.

 

[Beca]

If his lawyers suggest "going toe to toe" with DVC over this, he should change lawyers.

Any sensible lawyer would resolve this with a simple letter explaining that he's doing absolutely nothing that is at odds with the POS. Many businesses own thousands of points and use them for employee reward purposes; DVC even sells the program for that express purpose.

I don't think he is going to take any pro-active steps...I think he is just daring DVC to cancel something....that's just the way he is.